IIT, IISc and IIMA faculties urge new Govt to set up Telecom R&Development Fund

Delay will cost dearly & time is just ripe for us to shape the contours of future telecom evolution

Faculty Members from IITs, IISc and IIMA have urged the new Government to set-up a new Telecom Research and Development Fund (TRDF) and Telecom Entrepreneurship Development Fund (TEDF). Delay in setting up such funds will cost us dearly and time is just ripe for us to shape the contours of future telecom evolution, the said.

In a statement, signed by 35 faculty members from various IITs, IIMs and IISc, stated in National Telecom Policy (NTP) 2012 it was proposed to create funds for product development, IPR generation and manufacturing. These funds include Telecom Research and Development Fund or TRDF (to promote R&D towards IPR and promote product development), TEDF (to promote start-ups in the area) and Telecom manufacturing promotion fund or TMPF (to promote manufacturing in India).

A committee was also set up by DoT to develop the blue print of TRDF, TEDF and TMPF and a reported was submitted by the committee in early 2013.



"The government funding for telecom product development will create pull-through effect for overall electronics manufacturing eco-system thereby resulting in reduced import-bill and bridging of trade deficit. The growth of telecom manufacturing sector will also result in large scale job creation," said the statement.

"We are not asking for anything new, but that which was already there in the planning commission's document. We have submitted a representation with the Union Ministry for its consideration," said Ashok Jhunjhunwala, a Professor in the Department of Electrical Engineering, Indian Institute of Technology (IIT) Madras and who was head of a committee which submitted a report on the methodology of implementing these funds.

"It is the responsibility of the government to take the initiative in investing in Research and Development. We have been importing all the equipments from overseas all these years," he added.

Apart from the economic angle, there is strategic angle as well. Imported telecom equipment can pose big security threat. Today, telecom networks are considered as strategic infrastructure. Equipment deployed in such networks could have potential malware in it, which could even be triggered from outside India. This could seriously jeopardise national security, they added.

The government has garnered huge funding through spectrum auctions, telecom revenue-share and licensing charges and likely to earn even more through auctions and licensing fees. It is imperative that a part of these earnings is used to strengthen Indian IPRs, telecom products and manufacturing. The government must create and operationalise TRDF, TEDF and TMPF without any delay. The strengthening of telecom product and entrepreneurship ecosystem will have long-term fiscal benefits.

They added the Fund will catalyse the manufacturing eco-system and make us self-reliant in telecom technology for commercial and national strategic use. "This will also realise our potential to become a global technology player. The delay in setting up such funds will cost us dearly. Time is just ripe for us to shape the contours of future telecom evolution," they said.

Background

The Indian Telecom sector has been growing in the last two decades. Today, the total number of cell phone subscriptions is in excess of 850 million. The total revenue due to mobile services is more than Rs 1.70 lakh crore per year.

Tele-density in the country is close to 75 per cent, making India the second largest telecom market in the world, next to China.

"However this growth story has been scripted largely with significant dependence on equipment imports," said the faculties.

Demand for telecom equipment was close to a whopping Rs 75,000 crore in 2012-13 and projected to grow to more than Rs 1.70 lakh crore by 2019-20. A majority of this demand is met by imports and the telecom trade deficit stands at 70 per cent of the total demand implying thereby that the majority of equipment being bought by telecom operators is manufactured outside India.

To this one needs to add the import of subscriber equipment, including cell-phones, tablets and lap-tops used to access the telecom network. In 2013, about 150 million cell phones were imported at a total value of nearly Rs 30,000 crore.

"There is a high outflow of foreign exchange. Our growth story has been driven more by increased consumption of imported technologies and products rather than by innovations within the country," said the facilities.

Despite India being recognised for large talent pools of system, software and chip design engineers, even in some equipment, manufactured or developed in India, the components and devices are almost always 100 per cent imported, and Indian Intellectual Property (IP) embedded in the equipment is marginal.

IPR and product designs are however owned by the multinational companies that sell the products back in the Indian market. The proliferation of these companies shows that Indians have indeed learnt to design world-class telecom products today. However, there are very few Indian companies that are able to tap this talent to develop their own products and IPR. We do not have enough Start-ups that focus on products, even though there is large demand for products in India.